You need a video conversion program to convert .avi files to DVD format. See the links above provided by WW.

Note: you will lose some quality when you convert to DVD format. Everyone likes different conversion programs for different reasons. I have switched several times! The software that I would recommend is WinAVI (fast, doesn't take up much CPU, good quality). It costs $30. There is a trial version with limitations (either watermark on video or output limit of 30 min. probably).

If, however, you want top-notch quality, I would recommend TMPGEnc. The encoder in this program is phenomenal. You will end up with a DVD that is nearly indistinguishable from your source video. There are some drawbacks, however...it takes up a lot of CPU, and it takes a long time (6-8 hours, whereas WinAVI takes about 1 hour). It costs $100 for the current version, or $155 for both TMPGEnc and TMPGEnc DVD Author (which I also use). You will need to do some reading on the software, too, to get the best results out of it.

Another option, as I alluded to before, is to not convert your movies at all...get a DVD player that plays DivX format. You can fit 6 movies on one DVDR! Some movies, however, will look a little small, but at least you don't have to watch it on your computer.

Best of luck